1606002 Informal Interpretation

From: Walsh, Kathryn E.
Sent: Thursday, June 02, 2016 9:19 AM
To: [REDACTED]; Whitehead, Nora; Gillis, Diana L.
Subject: RE: Acquisition of Controlling Interest in Newco LLC

In determining whether a transaction is an acquisition or a formation, we look at what each party is contributing.  When one party is only contributing cash, we treat that as an acquisition.  So, here B is acquiring assets from A.

From: [REDACTED]
Sent: Tuesday, May 31, 2016 7:38 PM
To: Walsh, Kathryn E.; Whitehead, Nora; Gillis, Diana L.
Subject: Acquisition of Controlling Interest in Newco LLC

Hi Kate, Nora and Diana,

I hope everyone had a great holiday weekend.  In this transaction A and B are each committing to invest up to $400 million in Newco LLC, and A and B will each own 50% of Newco LLC at closing.  At closing, A will contribute:  i.) a plant valued at $150 million, and ii.) a plant under construction currently valued at $50 million.  B will contribute $100 million cash which will be distributed to A as a return of capital at closing.    Subsequent to the initial capitalization, capital commitments for the remaining spend on the plant under construction are payable 50-50 by each of A and B and are not subject to board-approved capital calls.  The remaining capital commitments are payable pro rata as called by the board from time to time when needed to finance Newco’s operations.  Any portion of a Member’s capital commitment that has not been called by the board within the 4-year period following closing will expire, unless extended at the discretion of the Member.  Can you confirm whether the transaction is considered an acquisition by B of 50% of the LLC from A (rather than as a formation of a joint venture)?

Many thanks,

[REDACTED]